BNY and Citadel Securities Complete Tokenized U.S. Treasury Transaction

Tokenized Treasuries Move From Settlement to Financing in Live Test

BNY, the world's largest custody bank, and trading firm Citadel Securities said Tuesday they completed a transaction using tokenized U.S. Treasuries. The demonstration showed how a blockchain-based version of a government bond (tokenization means creating a digital record of a real-world asset) could move from the settlement stage directly into financing, without sitting idle in between.

The transfer focused on collateral, which is the assets banks and trading firms use to secure short-term loans and fund trading activity. Traditionally, moving U.S. government bonds between accounts and settlement systems takes time, tying up assets that could otherwise be put to work.

What the two firms said

Dan Doherty, digital assets operations lead at Citadel Securities, described efficient movement of high-quality collateral as fundamental to well-functioning markets. He added that reducing delays across the trade lifecycle could improve how institutional markets operate.

Carolyn Weinberg, chief innovation and market transformation officer at BNY, said using a tokenized representation of a U.S. Treasury across both settlement and financing enables a more connected, efficient, and always-on financial system.

Key numbers and facts

• BNY is the world's largest custody bank.
• The transaction was announced on October 13, 2026.
• BNY plans to introduce more digital cash and tokenized deposit capabilities.
• BNY expects to extend its traditional settlement system hours to cover European and Asian trading hours next year.
• Triparty transactions, a form of short-term financing where a bank manages collateral between borrowers and lenders, are also in scope for expanded hours.

Other firms already experimenting with tokenized assets

The BNY-Citadel effort is part of a broader push by Wall Street to bring traditional assets onto blockchains. Firms including BlackRock, Franklin Templeton, and JPMorgan have adopted tokenized funds and securities, betting the technology can shorten settlement times, automate processes, and make assets easier to move between counterparties.

Why this matters for market efficiency

Collateral movement is a bottleneck in financial markets. When government bonds are used to secure loans and fund trading, delays in moving those bonds between settlement and financing stages mean assets sit idle and cannot be reused. The tokenized Treasury transaction tested a path to shorten that gap, potentially freeing up cash sooner for additional trades.

BNY's plan to extend settlement hours to match European and Asian trading windows would address another related constraint: current settlement systems operate only during U.S. business hours, leaving international traders waiting for bonds to become available.

Sources

• CoinDesk